Are you paying a convenience tax on your home loan?

Tara McCabe

04 Sep 2019

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Let’s face it: finding the best deal on your home loan can be a real headache, whether you’re a first-time buyer or an investor. If you don’t know where to look it’s a time-consuming process with a lot of fine print to wade through. 

So opting to go with a bank or lender that you have an existing relationship with might seem like the easiest way to go. But could the cost of convenience be stopping you from getting a better deal?

According to a recent report by the Australian Securities & Investments Commission (ASIC), 60% of Australian homeowners choose to stay with their existing bank or lender when taking out a home loan. ASIC found that most of the time this decision was influenced by convenience.

Homeowners often cited the fact that their existing bank already had all their financial information as their reason for choosing not to search for a better deal for their home loan. But, the report found that this loyalty was not always rewarded; a number of homeowners were disappointed with their bank’s failure to offer rewards or better deals to existing customers.

Managing Director of loans.com.au Marie Mortimer expressed her surprise that so many Aussies still settle for “an overpriced loan from their existing bank.”

“It shows that many borrowers still don’t understand just how simple it is to get a home loan online and how big the savings really are.”

With sites like Mozo doing the maths for you, these days finding a good home loan isn’t quite as tough as you might imagine. In fact, you can even check out the Mozo home loan repayment calculator to see how you can fit a home loan into your budget. Or if the process is entirely new to you then have a look at Mozo’s handy guides for first-time buyers. 

RELATED ARTICLE: Expert tips for home buyers taking advantage of the market

“A surprising number of people currently with a big bank can’t even tell you what interest rate they are paying on their home loan let alone how much that adds up to over time,” added Mortimer.

If you want to make sure that convenience isn’t costing you, then make sure you shop around. Whether you’re a first-time borrower or thinking about switching, looking further afield for a home loan with a better deal could save you a lot of dollars in the long run.

Check out some of the deals in the table below. Or head to Mozo’s home loan comparison tool, if you need help comparing home loan deals. The Mozo home loan comparison tool compares over 500 home loans from over 80 lenders. Just enter how much you want to borrow and over what number of years. You can even sort by what’s most important to you, whether it be a low interest rate or a low comparison rate. 

Now that you know where and how to compare deals, you can start searching for your dream home! Happy house-hunting!

Compare home loan deals - rates updated daily

  • Promoted

    loans.com.au

    2.88% p.a. variable

    2.90% p.a.

    $1234

    Product details Close details
    Smart Home Loan

    A low-rate home loan that could save you thousands. No application or ongoing fees. Unlimited additional repayments. Unlimited free redraws with no minimum redraw amount, Limited time only.

    • 2.88% p.a. variable

    • 2.90% p.a.

    • $520

    • $0.00

    • $0.00

    • yes - free

    • yes - free

    • no

    • 80.00%

    • $50,000

    • $1,000,000

    • Variable

    • Principal & Interest

    • Owner Occupier

    • Weekly, Fortnightly, Monthly

    Read our Mozo Review to learn more about the Smart Home Loan

  • Promoted

    UBank

    2.84% p.a. variable

    2.84% p.a.

    $1234

    Product details Close details
    UHomeLoan - Discount Offer

    Free redraw with flexible repayments. Min 20% deposit. Winner of a Mozo Experts Choice Award 2019 in the Low Cost Home Loan category^.

    • 2.84% p.a. variable

    • 2.84% p.a.

    • $0

    • $0.00

    • $0.00

    • yes - free

    • yes - free

    • no

    • 80.00%

    • $200,000

    • -

    • Variable

    • Principal & Interest

    • Owner Occupier

    • Weekly, Fortnightly, Monthly

    Read our Mozo Review to learn more about the UHomeLoan - Discount Offer

  • Promoted

    ANZ

    3.24% p.a. variable

    3.28% p.a.

    $1234

    Product details Close details
    Simplicity PLUS Special Offer LVR <80%

    Low rate. No ongoing fees. Can make extra repayments & redraw. Min. 20% deposit. Apply by 31/01/20 and settle by 30/04/20 for $2,500 cashback on eligible refinanced loans of $250K+ (incl. any new lending). Offer terms, fees, charges and elig. criteria apply.

    • 3.24% p.a. variable

    • 3.28% p.a.

    • $0

    • $0.00

    • $160.00

    • yes - free

    • yes

    • no

    • 80.00%

    • $50,000

    • -

    • Variable

    • Principal & Interest

    • Owner Occupier

    • Weekly, Fortnightly, Monthly

    • Refinance by 31 January 2020 to receive up to $3,500 cash back depending on the loan amount with an ANZ linked transaction account.

    Read our Mozo Review to learn more about the Simplicity PLUS Special Offer LVR <80%

  • Promoted

    Suncorp

    2.89% p.a.
    fixed 3 years

    3.70% p.a.

    $1234

    Product details Close details
    Fixed Home Loan Special Offer Home Package Plus

    Receive a $2,000 cash bonus when you take out a Home Package Plus home loan of $250,000 or more (T&Cs apply). No monthly account keeping fee & No loan establishment fee.

    • 2.89% p.a.
      fixed 3 years

    • 3.70% p.a.

    • $0

    • $375.00 yearly

    • $350.00

    • yes - free up to $500 per month

    • no

    • no

    • 90.00%

    • $150,000

    • -

    • Fixed

    • Principal & Interest

    • Owner Occupier

    • Weekly, Fortnightly, Monthly

    • Receive $2,000 when you refinance an existing loan of $250,000 or more with an LVR of <90%. Apply by 13 December 2019 and settle by 5 March 2020.

    Read our Mozo Review to learn more about the Fixed Home Loan Special Offer

  • Promoted

    Newcastle Permanent

    3.19% p.a. variable

    3.23% p.a.

    $1234

    Product details Close details
    Special Real Deal Home Loan

    Free extra repayments. No application or service fees. Only 10% deposit needed. Winner of a Mozo Experts Choice Award 2019 for the First Home Buyer Loan and Investor Home Loan categories.^

    • 3.19% p.a. variable

    • 3.23% p.a.

    • $0

    • $0.00

    • $0.00

    • yes - free

    • yes - fees apply

    • yes - partial only

    • 90.00%

    • $150,000

    • -

    • Variable

    • Principal & Interest

    • Owner Occupier

    • Weekly, Fortnightly, Monthly

    Read our Mozo Review to learn more about the Special Real Deal Home Loan

*WARNING: This comparison rate applies only to the example or examples given. Different amounts and terms will result in different comparison rates. Costs such as redraw fees or early repayment fees, and cost savings such as fee waivers, are not included in the comparison rate but may influence the cost of the loan. The comparison rate displayed is for a secured loan with monthly principal and interest repayments for the amount and term you entered.

**Initial monthly repayment figures are estimates only, based on the advertised rate, and a loan of $500,000 repaid over 25 years. Rates, fees and charges and therefore the total cost of the loan may vary depending on your loan amount, loan term, and credit history. Actual repayments will depend on your individual circumstances and interest rate changes.

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